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spk01: Thank you for standing by and welcome to the EHANG first quarter 2022 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms. Julia Kan. Please go ahead.
spk08: Hello, everyone. Thank you all for joining us on today's conference call to discuss the company's financial results for the first quarter of 2022. The earnings release is available on AIA website as well as from Newswire Services. Please note the conference call is being recorded and the audio play will be posted on the company's AIA website. Today, Yihang's management team, which includes Mr. Hu Huazhi, Chief Executive Officer, Mr. Edward Shi, Chief Strategy Officer, Mr. Xin Fang, Chief Operating Officer, and Mr. Richard Liu, Chief Financial Officer, were successfully giving prepared remarks. Remarks delivered in Chinese will be followed by the English translations. All translation is for convenience purpose only. In the case of any discrepancy, management's statement in the original language will prevail. A Q&A session will follow afterwards. Before we continue, please note that today's discussion will contain forward-looking statements made in pursuit to the safe harbor provision of the U.S. Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filing with the SEC. The company does not assume any obligation to update any forward-looking statements except as required under ACABU law. Also, please note that all the numbers presented are in RMB and are for the first quarter of 2022 unless stated otherwise. With that, Let me now turn the call over to the CEO, Mr. Hu Huazi. Please go ahead, Mr. Hu.
spk02: Thank you, Julia. Hello, everyone. Thank you for attending the phone call meeting of E-science. Since the first quarter of 2022, the external impact and uncertainty caused by the pandemic and the prevention and control measures of the international situation have become more and more stable. Therefore, we are more focused on In the path of self-development, we have come to a good start, mainly reflected in the power to promote market certification, key talent absorption, and market opening. First of all, in terms of market approval, this is still the first priority of the company's current development. As the world's first self-driving self-driving aircraft designer, developer, and manufacturer, we can't help but face the world's attention and expectation, as well as the supervision of the strictest standards and challenges. This is the pressure that the pioneers of a innovative industry will bear, and it is also our continuous challenge and breakthrough of our own power. After a long 10-month in-depth communication and cooperation with the China Civil Aviation Bureau review team and the China Civil Aviation Bureau, in February this year, the China Civil Aviation Bureau officially passed and announced the special conditions for the E-216S unmanned aerial vehicle system. has set an important milestone for our market audit work, and has also become a pioneering milestone in the development process of this innovative industry. Unlike other airlines that have pilots driving, Yi Hang's products are advanced and innovative in unmanned driving technology and operation mode, and bring more new challenges in the field of data chain, complex system and software compatibility verification. Our technical team We will continue to explore and improve the appropriate methods. Our specialized audit plan is about to be approved by the Chinese Civil Aviation Bureau. The audit project node, audit basis, appropriate methods, verification test plan, post-evaluation management, and other content are agreed to promote the audit work of the market as soon as possible. In terms of production manufacturing, On the basis of the international air quality management system certification of AS9100D, we are following the production approval and supervision procedures of the Chinese Civil Aviation Bureau to further improve our quality, craftsmanship, production, and supply chain system based on model certification and production certification. At the same time, we have completed the verification machine used for manufacturing compatibility verification. We are working closely with the Chinese Civil Aviation Bureau to overcome the impact of many factors such as domestic We are very happy that Mr. Fang Xin, our chief operator, joined us in February this year. He is in charge of the daily business and business development of the company. Mr. Fang has more than 20 years of rich experience in business management, technology product solution and sales, travel project development and operation. He will bring new momentum to the bank. Recently, we also hired a new production vice president. The participation of Mr. Zhang Jiangke will lead the team to improve the production and manufacturing system of Yihang to a more mature and perfect industry leading level. Mr. Zhang has more than 20 years of aircraft manufacturing experience. He is the technical manager of China's first CCAR-23 all-in-one aircraft manufacturing and CCAR-25 large-scale amphibious two-stage aircraft deputy engineer. He used to work for the JEE All-Infrared Electronics Co., Ltd. Thank you, Julia. Hello, everyone. Thank you for joining our earnings call today.
spk09: Since the first quarter of 2022, we have been facing and mitigating external impact and uncertainties resulting from microeconomics, geopolitics, an ongoing pandemic and its associated prevention and control measures. However, the more adversities, the more important to maintain stable development. As such, we are more focusing on strengthening ourselves and have ushered in a good start in this year. which is mainly reflected in airworthiness certification, the key talent recruitment, and market expansion. First of all, let's dive into our airworthiness certification process, which remains our first and foremost priority of the company's development at the current stage. As the world's leading designer, developer, and manufacturer of passenger-grade autonomous aerial vehicles, which is dedicated to achieve commercialization, we are undoubtedly receiving attention and facing expectations across the globe, as well as the most stringent standards and tests from regulators. This is the pressure a pioneer of an innovative industry will inevitably bear, but it is also motivation for us to consistently challenge ourselves and make breakthroughs. After more than 10 months of in-depth communication and cooperation, between our airworthiness team and the type certification team of the CEC. The CEC formally adopted and issued the special conditions for the E1016S AAV type certification in this February, which laid a critical cornerstone for our airworthiness certification and is also a groundbreaking milestone in the development of this innovative industry. Distinct from the type of certifications of other aircraft operated by pilots, the advanced and innovative nature of ETH's product in the aspect of airman-airway technology and operation mode leads to newer challenges in compliance and verification for data links, complex systems, and software. However, our technical team and airworthiness team are tackling challenges step by step and are continuing to explore and refine the means of compliance. Our project-specific certification plan is about to get the CAC's approval, with which we will reach consensus with CAC over expected timelines of the certification project, the certification basis, the means of compliance, verification plans, after certification management, etc., in order to accelerate the airworthiness certification. In terms of our production, on the basis of AS9100D, an international aerospace and aviation quality management system certification that we have obtained, we are also following the CAC's production approval and the supervision procedures with an orientation to secure the type certificate and a production certificate to further refine and improve our quality, manufacturing technique, production, and supply chain systems. Meanwhile, we have produced validation-used AAVs for manufacturing conformity inspection. We are trying to overcome the impact of manufacturers, such as the domestic epidemic, and work closely with the CAC to complete the certification work as soon as possible. Next, let's move on to talent acquisition. We are very pleased to have our Chief Operating Officer, Mr. Fang Xin, join us in February. He is responsible for managing the company's daily operations and business development. Mr. Fang has more than 20 years of experience in corporate management, technology product solution sales, as well as tourism project development and operation, which will bring new driving forces for the company. Recently, we also welcomed Mr. Zhang Jiankou, our newly appointed vice president of production on board. He will lead our production team in elevating Ehang's manufacturing system to more mature, optimized, and industry-leading levels. Mr. Zhang has more than 20 years of experience in aircraft manufacturing technology. Notably, he was the manufacturing technology head of China's first fully composite general-purpose aircraft, compliant with CCAR-23, and also the deputy chief engineer of the largest amphibious airplane, compliant with the CCAR-25. He had also worked for Unison Engine Components, a wholly owned subsidiary of General Electric. We will continue to move forward talent recruitment and R&D, while always keeping steadfast in continuous innovations. On the market expansion front, in addition to continuing our development in China, we have also received pre-orders for a total of 210 units of passenger-grade AVs so far this year in multiple Asian countries, including Japan, Malaysia, Indonesia, and Thailand. This is a testament to the strong customer demand and a global prospect for our products. which is further illustrated by plans for introducing enhanced AAVs into various local markets and co-developing regional air mobility business with us. And we expect these pre-orders will be delivered gradually upon obtaining the Airworthness Certificate and lay a solid foundation for our future growth. I will now turn the call over to Chief Strategy Officer Edward Xu to bring more detailed performance. Thank you.
spk06: Thank you, Mr. Hu. Hello, everyone. In the first quarter of the year, our company continues its focus on the strategic goal of UAM platform operator, steadily upgrading towards a sales-plus operation integrated business model. Ehang's unique AAV technology and a smart command and control system will enable the underlying technologies for the future air traffic management, the AAV distributed operation and management, the digital operating and service systems, as well as the ecosystem expansion. These are also Ehang's differentiated advantages and the fundamental driving force empowering our commitment to becoming a leading UAM platform operator. Based upon our positioning of the AAV operational platform, we have been actively cooperating with upstream and downstream industry stakeholders, such as the government, regulators, professional scientific research institutions, aviation components suppliers, telecommunication service providers, general aviation operators, the airport and the road infrastructure operators, real estate enterprises, large commercial groups, as well as our clients and partners in the fields of tourism, transportation, logistics, emergency and rescue, medical and firefighting, to jointly explore and develop a UAM ecosystem tailored for AAVs, thus leading and promoting the development of a safe, efficient, and sustainable smart air mobility industry. For instance, our recent customers and partners in other Asian countries all have extensive resources and experiences in their local markets, such as the CP Group, a large multinational conglomerate in Thailand. These strong partners will stimulate the expansion and growth for the company's overseas business development at both sales and operation levels. Besides China, Asia is one of the significant strategic markets for us. Now, let me turn the call to our CEO, Mr. Fang, to address our progress on the business front. Mr. Fang, please go ahead. Thank you.
spk03: Thank you, Mr. Xu. Hello, everyone. I have been in the industry for more than three months. In these three months, the core strategic goals of the company's air traffic platform operator and the sales operator operator integrated business model, the company's various work is in progress. Since the first quarter of this year, due to the re-emergence of the epidemic in China and the stricter travel restrictions, we are facing some pressure, challenges and uncertainty like most Chinese companies. For example, we have been delayed the progress of the offline and live audit work of the Chinese Civil Aviation Bureau's TC audit team. The related business of the tourism industry is affected, and some tourism scenarios are restricted, etc. Despite this, we believe that these external influences are only short-term. The company's long-term development is still full of confidence. With the core technical advantages of our industry, clearly developed strategy, diversified product lines and solutions, top-level market verification process, comprehensive business layout, and steady production and manufacturing base with the growing market demand and order reserve. As mentioned earlier, since the first quarter of this year, we have developed and built the market in other Asian countries. In January of this year, we acquired Air traffic input platform company, which is leading in Japan, and ILX, the provider of helicopter service platform. In March, we established strategic cooperation with Malaysia's leading airline company, ILHC, to acquire 50 ILX and 10 VT30. In April, we acquired a company from Indonesia, Platinum Aviation's 100 E-sports 2.161 orders, and Yogyakarta, the capital of Indonesia, completed the flight demonstration. Last week, we just announced strategic cooperation with Thailand's large cross-border group, Zhengda Group. The three sides agreed to establish a joint venture in Thailand, to bring E-sports AAV into the Thai market, and to carry out comprehensive cooperation locally. At the same time, we are continuously promoting the adaptation of the Air Traffic North Line project. The main focus is Yekong-Ou-Daban District. We have cooperated with customers, shipping companies, real estate companies, and other joint partners from all over the world. We have launched nine AAVs in Guangzhou, Hezhou, Shenzhen, Zhaoqing, Sanya, Zhuhai, Yangjiang, and so on. And based on the actual flight environment and use scenarios, we have completed more than 4,800 flights in total. Through aeronautics, aerial travel, aerial performance, and many low-altitude flight services with digital airspace management to create a multi-angle aerial view of the city. In addition, the development and construction of network platform systems and operating systems are in progress. The core system structure and database construction of network flight, flight navigation, aircraft navigation, mission management, and other functions are in progress. The first stage of the flight planning and operating navigation management system has been completed and entered into testing. According to the daily work use of the three seasons this year, the operation preparation of various AAVs is being carried out in advance, so that the company can quickly launch commercialized operation services after obtaining the relevant supervision certification. We hope that under the joint promotion of the government, supervision, customer service and cooperation partners in the transportation industry in the city and air, Thank you, Edward. Hello, everyone. It has been more than three months since I joined EHAM. During the period, the company has been operating well and smoothly.
spk09: with a focus on its strategic goal of UEM platform operator and a sales plus operation integrated business model. Since the first quarter of this year, like most Chinese companies, we have been facing pressures, challenges, and uncertainties due to the resurgence of the COVID-19 in China and the stricter travel restrictions. For example, Our original schedule of offline communication and onsite inspection meetings with the CACTC team had to be delayed. And the tourism-related business also saw adverse impact as our operational trial flights were restricted at certain tourism sites. Nevertheless, we believe these external impacts are only temporary. We still remain confident in our long-term development and growth. with our inherent core technology advantages, clear strategy, diversified product lines and solutions, ongoing process for our industry-leading airworthiness certification, and comprehensive layout, ever-growing market demand and pre-orders at our firm manufacturing foundation. As noted earlier, since the first quarter of this year, our market expansion in other Asian countries has achieved positive progress initially. In January this year, we received a pre-order for 50 units of Ehang 216 series in Japan from AirX, a leading Japanese air mobility digital platform company and a private helicopter charter service provider. In March, we partnered with Aruchi, a leading Malaysian aviation company, and received a pre-order for 50 units of Ehang 216 series and 10 units of VT30. And in April, we received a pre-order for 100 units of Ehang 216 from an Indonesian aviation company, Prestige Aviation, and successfully performed the flight demonstration in Jakarta, the capital of Indonesia. And last week, we formed a strategic partnership with Zipi Group, one of the largest conglomerates in Thailand, and both parties plan to establish a joint venture in Thailand to introduce e-hung AAVs to the Thai market with comprehensive cooperation. Meanwhile, we continue to advance trial operations under the 100 Air Mobility Routes Initiative. With a focus on Guangzhou, Hong Kong, Macau, Greater Bay Area, we have worked with our customers and partners like the general aviation companies and the real estate companies to launch nine AAV operation spots. in Guangzhou, Hezhou, Shenzhen, Zhaoqing, Sanya, Zhuhai, Yangjiang, and other cities. To date, more than 4,800 operational trial flights have been carried out in practical flight environments and application scenarios. Moreover, our commercial flight routes are in the process of continuous development, test flight, data accumulation, and verification. in order to ensure adequate verification of flight safety and consistent quality with sufficient flight record. Not only that, we are accelerating the layout of the digital low altitude ecosystem. Derived from our inherent software platform advantages, we are planning on low altitude flight services and the digital airspace management to create various aerial operation scenarios for smart cities. such as the aerial sightseeing, aerial transportation, aerial media, etc. In addition, we are actively developing and building our online booking platform system, namely our operating system. The core system architecture and the database construction of online flight bookings, together with flight scheduling, aircraft dispatching, task management, and other functions, have already begun to take shape. The initial flight scheduling and operating system has been developed and is running tough, and it is expected to put into daily operations in the third quarter of this year. Overall, all AAV-related operations are being prepared in advance to ensure that the company can quickly start commercial operational services after obtaining relevant regulatory certifications. With the joint efforts of Yiheng and all parties in the urban air mobility industry, including the governments, regulators, customers, and partners, we expect to achieve our mission in the near future to make everyone enjoy a safe, autonomous, and eco-friendly air mobility experience. I will now turn the call over to our CFO, Richard Liu, for financial results. Richard, please go ahead. Thank you.
spk07: Thank you, Xin, and hello, everyone. Before I go into details, please note that all numbers presented are in RMB and are for the first quarter of 2022, unless stated otherwise. All presented changes are on a quarter-over-quarter basis, unless otherwise specified. Detailed analysis are contained in our earnings press release, which is available on our IR website. I will now highlight some of the key points here. In the first quarter of 2022, we continued to execute our strategies towards an urban air mobility platform operator. Additionally, we maintain our focus on the EH216 type certification process with the CAC and further developing the 100 air mobility route initiative with increasing operational tri-flights in selected locations in China. With these concerted efforts, we remain confident and positive on the long-term prospects of our business growth. As a result, in Q1 of 2022, total revenues were 5.8 million compared with 8.7 million in Q4 of 2021. The EH216 series of AAV deliveries in Q1 were 3 units compared with 4 units in Q4. However, it's worth noting that recently we have seen increasing interest from customers in China and overseas. For example, we have secured AAV pre-orders of up to 210 units in Japan, Malaysia, and Indonesia since the beginning of the year, which demonstrate strong demands and great potential for products internationally. These pre-orders are expected to be delivered in the coming years. Our overall gross margin has continued to maintain at a high level as compared to those of other companies with new energy mobility products such as electric cars. Our gross margin was 62.5% in Q1, up 2.4 percentage points from 60.1% in Q4 last year, mainly due to changes in revenue mix. In Q1, our adjusted operating expenses, which are operating expenses excluding share-based compensation expenses, decreased by 49.1% quarter-over-quarter to 46.1 million from 90.4 million in Q4 last year. There were lesser provisions for accounts receivable related to the impact of COVID-19 pandemic. Additionally, expenditure in R&D materials were lower than Q4 last year, as they usually vary following development progress for different projects between periods. With that, in Q1, our adjusted operating loss was $41.7 million and adjusted net loss was $40.9 million, each representing an improvement of roughly 50% from $83.8 million and $82.2 million in Q4 last year, respectively. With regard to our balance sheet, as of the end of Q1, we had $236.9 million of cash, cash equivalents, restricted cash, and short-term investments. We will continue our efforts to effectively manage our operating expenditures. That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead.
spk01: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Tim DeSalle from Morgan Stanley. Please go ahead.
spk05: Hi, everyone. Thanks for taking my questions. I've got a few quick questions. So the first one, I think that makes the funds during the presentation briefly touch on your collaboration with the CP Group announced last week. So just wondering, could you please share a little bit more about the details of business opportunities we are looking for and how the business model will work and what kind of contribution we should expect in the upcoming quarters. Second question is about production discussion, because I think a lot of supply chains that basically suffer from recent COVID lockdown have encountered any hiccups in terms of production, part sourcing, or types of certificate obtainment and all the operation related stuff. Do we see any risk of further delays in terms of the certificate receiving? So that's my second question. My last question is about our new models. Can you please share a little bit more about the operational updates on VTA30? plan to get a certificate on this new model. So those are my three questions.
spk03: Thank you. Thank you very much. I'm Fang Xin. Next, I will answer these questions.
spk09: Hi, Tim. Thank you for the questions. This is Fang Xin. I will take your questions.
spk03: Last week, we were very happy to announce that we have achieved strategic cooperation with the Thai government. Last week, we are very pleased to announce the strategic partnership with Thailand's CP Group.
spk09: And we plan to establish a joint venture to launch our partnership. And it reflects both companies' high recognition of each other and the willingness for deep cooperation. And this will lay a good foundation for AAV sales and urban and mobility business in Thailand in the future. And we look forward to initiating our collaboration.
spk03: As we know, the CP Group is not only one of the largest conglomerates in Thailand,
spk09: but it also has investments in 21 countries and economies. The group is compromised of eight business lines and 14 business groups covering various sectors of agricultural industry and food, retail and distribution, media and telecommunications, e-commerce and digital, property development, and industrial products. and pharmaceuticals, et cetera.
spk03: We see a lot of potential use cases for our AAVs in the CP Group business field, such as the tourism, logistics, healthcare,
spk09: disaster relief, agriculture, and so on. Both of us plan to leverage our own expertise and resources in a long-term comprehensive collaboration on the AAB product sales and marketing, regulatory compliance, the business development, and the infrastructure deployment, talent cultivation, and so on, for our future UAM operations, and introduce the safe, autonomous, and sustainable air mobility technology and solutions to the Thailand and more markets.
spk03: 以上是對Tim第一個問題的回答,謝謝。 That is my answer to Tim's first question, thank you. 鉛益最近疫情的封鎖,我們在生產逐漸的太空。 In light of the recent COVID epidemic, for your second question, as mentioned before, since the first quarter of this year, like most Chinese companies,
spk09: We have been facing pressures, challenges, and uncertainties due to the resurgence of the COVID-19 pandemic in China and the stricter travel restrictions. In respect of production, we didn't see any significant impact so far from the epidemic on our supply chain because our suppliers are mostly in the Guangdong area in South China. And due to the changes of the global landscape, we saw some price increase of some raw materials. So we did some preparation with some inventory of the key components and materials beforehand.
spk03: In terms of the KC audit, the progress of the project has been affected and the method has been broken down. Because of the current high school meetings and the audit work, there is no normal improvement. In respect of the types of vacations, the process was affected and had been slowed down as our offline communication and on-site inspection meetings with the CACTC team could not be normally conducted.
spk09: Having said that, we have been trying our best to minimize the impact of manufacturers, including the recent domestic epidemic, and working closely with the CAC to complete the certification work as soon as possible.
spk03: In terms of sales interaction and operations, the business development related to the tourism industry has been greatly affected, and some restrictions have been imposed on tourism locations.
spk09: From the perspective of sales delivery and operation, our tourism-related business was also impacted, as our operational trial flights were restricted at some tourism sites.
spk03: We are facing a lot of challenges and uncertainties in terms of our revenue this year. We are closely monitoring the progress of the market and the market market, and adjusting our strategy accordingly. However, we remain confident in the long-term development prospects for the future.
spk09: With regard to the revenue of this year, as we are facing many challenges and uncertainties, we are closely watching the development of the market conditions and also the certification progress. And we are adjusting our strategies to be adaptable accordingly. But we remain confident in a long-term outlook going forward. 以上是對於第二個問題的回答,謝謝。 That is my answer to your second question. Thank you.
spk03: 歡迎您的第三個問題。 現階段公司私行認證工作主要針對一航IR6-S產品。 For your third question, at current stage, our airworthiness certification work is focusing on the Yihan 216X product. 對於VT30,我們秉承安全第一的原則,不急躁,不冒進。 For the product of our VT30, we have maintained the principle of safety first, and there is no need to rush.
spk09: In the process of designing R&D and testing for this product, we have been establishing this air witness system. We started with a lot of aircraft component test first to ensure the overall safety of the aircraft, and then carried out a larger number of flight tests.
spk03: That is my answer to your third question. Thank you.
spk01: The next question comes from from Yanfang Securities. Please go ahead.
spk04: Hi, thank you. Thank you for taking my questions. I have two questions as well. My first question is regarding to employees in the research and product development department. I see that we have around, I'm guessing, 50% increase in personal and mostly in the R&D side. Is it possible to give us a rough distribution between the 189 R&D personnel increase? Like for example, some percentage is working on AAV and its new model and so on and so on. And given the big increase in R&D employees, what areas are those newly recruited employees mostly working on? And for my second question, it's about the strategic partnership between EHA and CP Group. We see that Yihan is actively forming key partnership with companies from each countries of Southeast Asia. Are we going to see similar strategies in rest of the global region? And most importantly, will we see similar strategic partnership in China as well? Thank you so much.
spk07: Thank you, Di, for your questions. This is Richard Liu. Let me take your first question. And Edward probably can answer your second question regarding the market strategy. I understand the number of employees you're talking about is from our 20th of 2021. The size of our R&D team has been steadily increasing as we continue to enhance our R&D capabilities, which is our core competitive advantage. So basically, the distribution of our R&D team follows our R&D strategy, which is to establish an integrated technology platform that is across different technological functional areas and lays the foundation to create synergy for developing different products. Overall, our R&D team is roughly 40% in hardware development and 30% in software development, with the rest in other major areas such as certification and testing, et cetera. The core team of our R&D team has been stable with the company since early days. They have accumulated abundant and leading experience and insights in AAV and EV toll technologies. And the big increase in 2021 you mentioned was evenly distributed with an emphasis on the certification and testing areas as the year 2021 was an important year for our certification process. So hopefully this answers your question. Thank you.
spk05: Thank you.
spk06: Hello, this is Edward, Chief Strategy Officer here. So I'd like to answer your second question regarding our global strategy forming partnerships. So basically, as we mentioned earlier, we've positioned ourselves as UAM platform operator, and we understand that UAM industry is a whole ecosystem so we are trying our efforts to build this whole ecosystem which means that it consists of not only the regulators but also different partners in which we are cooperating with real estate operators amusement park operators and conventional aviation operators etc. So as you can see this time, we just formed a very good partnership with the CP Group in Thailand, which is very honorable with high reputation and strong capabilities in Thailand. So similarly, we are also seeking different partnerships with different countries and markets. But as you know, that our focus is in China first. So, which means that in China, we actually, we had a few extensive partnership with quite a number of, you know, reputable companies, which includes, you know, the Greenland, Hong Kong, and, you know, Shenzhen Expressway, and, you know, Guangzhou Infrastructure Corporation, communication group, etc. So we have quite a number of solid partners in China. And in overseas market, as we mentioned earlier, the market will focus on Asia including Japan, Korea, and the Southeast Asia countries such as Thailand, Malaysia, Indonesia etc so we actually see very good interest from those markets and furthermore we are also working with some European and US market partners so which means that you can see you know we had a very good relationship with these partners so you know hopefully you are going to see more partnership in the future. Thank you.
spk04: Thank you. Thank you so much.
spk01: There are no further questions at this time. I will now hand the call back to Ms. Guillen for closing remarks.
spk07: Thank you, operator. This is Richelieu. Thank you all for participating on today's call and for all your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Thank you.
spk01: That does conclude our conference for today. Thank you for participating. You may now disconnect.
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